Initial Public Offerings Paper Essay

In tramp for a attach to to build their business, numerous pursue to either merge with anformer(a)(prenominal) ac companionship or acquisitions from another company. some other option a company should get by when building their business is to make an sign public Offering. An initial human beings crack is the rootage sale of investment company by a company to the man. A company can mount money by issuing either debt or rectitude (Know Finance., n.d.). Microsoft, Apple, and Samsung have stepped into the stock market by their IPO. These strides atomic number 18 what it takes to raise money and what roles protagonist the company begin an IPO.Most corporations barrack to an initial frequent offering with an enthronisation banking stiff by acting in the capacity of an underwriter. An commitment banker is a soulfulness who works in a fiscal institution that primarily goal is to raise capital for companies, governments and other entities (Investopedia, n.d.). An un derwriter is a person that provides some(prenominal) financial function that includes helping with assessing the value of shares and establishing a public market for first sales (Investopedia, n.d.). An underwriter responsibility is allotting securities issued to the public. There are several risks that are involved in a public offering. Initial public offering stocks is one of the risks involved in public offering ( monetary Web, 2014). This is some seasons called going public be fountain the stock is offered first to the public.Share, the risks of the company, can sometimes be profitable, scarce a risk as well as. An investor, shareholder, or individual may be at risks if they invest their money within a company that is going public for the first time ( financial Web, 2014). Pricing of effective is one of the risks that are involved in a public offering. Pricing goods too high or too down in the mouth is not acceptable in the public offering. Investors and shareholders p rovide not invest in a company if there are any issues with the pricing. A firm and their investors give lose money their money if the cost of goods is priced too low. This may cause investors to realise out of the firm corporation (Financial Web, 2014). Loss of income and revenue may sometimes make the underwriters hold the store and additional funds. big holding terminus and lack of information are other risks that are involved in a public offering. Lack of information may cause investors to pull out of the firm because the firm failed to provide all of the documents and files. Long holding period may cause a decrease in stock price. TheU.S. Securities and Exchange Commission (SEC) protects the investors, maintain fair, efficient markets, orderly, and facilitate capital formation ( connect Capital Inc., 2014). The SEC deals with industries by monitoring, managing the monetary value of sales by preliminary prospectus and setting rules and regulations for companies. Prelimin ary prospectus is when the company and the securities are issues to the firm. A firm will have provided their income statement, balance sheets, its current activities, and other documents that provide information about the firm. The litigation Reform Act of 1995 (PSLRA) was put in act to increase the success in private litigation for securities fraud.ReferencesInitial Public Offering (IPO) Know Finance. (n.d.). Retrieved from http//www.knowfinance.com/ipo/ enthronement Banker Definition Investopedia. (n.d.). Retrieved from http//www.investopedia.com/terms/i/investmentbanker.asp general agent Definition Investopedia. (n.d.). Retrieved from http//www.investopedia.com/terms/u/underwriter.asp Financial Web. (2014). Retrieved from http//www.finweb.com/investing/therisksofinitialpublicofferingstocks.com Bridge Capital Inc. (2014). Retrieved from http//bridge.com